iYogi bags $9.5 mn from SAP-led VCs in second round funding

Papia Lahiri, ET BureauJul 25, 2008, 03.11am IST

NEW DELHI: iYogi, the Gurgaon-based B2C technology support provider, has secured a second-round funding of $9.5 million from a consortium of VCs led by SAP Ventures, a division of the German software major SAP. This is SAP Ventures first investment in India and the fund is close to investing in couple of other IT and ITeS companies in India.

Other investors in iYogi include Canaan Partners and Silicon Valley Bank (SVB) India Capital Partners. iYogi, a remote technical support provider with a customer base of over 50,000, primarily in the US, will use the funding to expand operations in new geographies, to increase execution capability, delivery of new services and to enhance its marketing effort. The company has 450 technical support staff and plans to ramp it up to 2,000 in the next couple of years. It has a unique offshoring model that focuses on providing technical support to individual retail customers (personal offshoring) rather than enterprise customers, as most BPOs do.

"Personal Offshoring has created new investment opportunities in India. We can't reveal specific investment details but our stake is less than 20%, and this is the case in all our investments," said SAP Ventures partner Doug Higgins. earlier, SAP Ventures focused on the US market and had been looking out for companies to invest in India for the past 18 months. Now, they are planning to allot about 30% of their fund to investments in India.

iYogi, which operates in the US, UK and Canada, is planning to use the funds to fuel its expansion into 12 new regions, including Australia and India, by 2009. The company offers its customers an unlimited, annual tech support service subscription for $120 per desktop that includes support for PC hardware, software applications, peripherals and other devices.

"We are adding about 6,000 new customers every month. We are delighted to have the support of three great investors as we increase our market share," said Uday Challu, CEO, iYogi. The company has set a revenue target of $100 million over the next three years.